Back in RDA Microelectronics
I’ve started nibbling back into RDA Microelectronics (Ticker: RDA) (picked some up today at $17.67), which is being acquired by Tsinghua Unigroup for $18.50 in cash ($18.45 if you factor in the $0.05 ADR fee). This deal was announced in November 2013 and has dragged on quite a bit. I believe we’re approaching a more favorable risk reward time for this merger arb play. PDST originally made a bid for the company, but Tsinghua came in at the last minute and offered a more compelling price. PDST went through the formal channels by obtaining the “road pass”, which allowed PDST to make a bid for RDA Microelectronics. When Tsinghua Unigroup made the counter bid, they did not obtain a “road pass”. The Chinese regulators have held up the approval because of this issue. PDST original road pass was obtained on 11/05/13 and is valid for 6 months. The 6 months is coming up (05/05/14) and at that point Tsinghua Unigroup can formally apply for the “road pass” since only one “road pass” can be granted at a time. The regulatory approval for out bound deals has also been relaxed (no "road pass" required) starting in May 2014 for deals under $1 billion, which applies to this transaction so we should be hearing soon on the status.
5 Comments:
Any idea why the price dipped? Is it something to be concered about? Or is it a buying oppurtunity? Price was below $17 this morning. I do not see any news relevant to the acquisition.
Definitely concerning...
I have no info to account for this drop. I'm out of the position for now.
http://finance.yahoo.com/news/rda-microelectronics-responds-certain-media-115055216.html
This is one weird take over play. I would have thought that PDST would be out of the picture now and Tsinghua Unigroup can focus on getting this deal done. It looks like PDST and the regulatory agency are going to make this difficult for Tsinghua.
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